A series of aggressive ICE raids across Los Angeles has driven much of the city’s migrant workforce into hiding, sparking alarm among business leaders and public officials already grappling with an unstable economy and the aftermath of devastating wildfires.
As California’s largest city struggles to rebuild, developers and employers say they’re facing a severe labor shortage, one that’s only getting worse due to fear among undocumented workers.
“Papers or not, fear spreads quickly,” said Joshua Baum, founding principal of real estate consulting firm Hilgard, in an interview with Bloomberg. “When workers don’t feel safe showing up to job sites, construction slows—and new projects get shelved before they even begin.”
The Backbone of LA’s Economy in Hiding
According to 2023 data, nearly 38% of LA’s workforce consists of immigrants, making it one of the most migrant-dependent labor markets in the U.S. An estimated 950,000 unauthorized residents live in Los Angeles County, and 1 in 10 workers across California is believed to be undocumented.
Recent ICE operations—including a Fourth of July raid on a carwash and arrests at a Home Depot—have only intensified the fear. From June 6 to June 22, more than 1,600 people were detained in ICE sweeps throughout the city, Bloomberg reported.
Footage from MacArthur Park on Monday showed immigration agents patrolling on horseback and in armored vehicles, stopping people and demanding identification. Although officials have not released specific numbers, reports suggest multiple detentions occurred during these patrols.
Economic Fallout
For many employers, the results have been immediate and devastating. Arturo Sneider, CEO of Primestor, which oversees over $1.2 billion in development projects, said, “We don’t have enough people to staff the work and we’re scrambling to figure it out.”
The Urban Land Institute estimates that LA needs to add 70,000 workers to its construction workforce by mid-2026 to meet demand—especially after wildfires destroyed more than 16,000 structures across the county.
The Los Angeles Economic Development Corp. reports that approximately 14.5% of LA’s construction workers are undocumented, meaning ICE’s intensified presence is paralyzing a vital part of the recovery process.
Political and Legal Uproar
The raids have drawn sharp rebukes from city officials. Mayor Karen Bass condemned the federal actions, calling them “economically devastating” and accused the Trump administration of targeting Los Angeles as a “test case.”
“We will stand strong,” Bass said. “The people being chased through parking lots are not threats. They are Angelenos—our neighbors, coworkers, and family.”
Bass was seen rushing to the scene during Monday’s downtown sweep, confronting ICE agents and demanding they “leave immediately,” according to FOX 11.
West Hollywood officials issued a statement echoing the mayor’s concerns: “Our immigrant communities are not threats—they are essential contributors to the social, cultural, and economic fabric of our city.”
California has also filed a lawsuit against the federal government, accusing President Trump of deploying 4,000 National Guard troops and 700 Marines without Governor Gavin Newsom’s authorization during early-June demonstrations. The state argues that this action violated its sovereignty and set a dangerous precedent.
Meanwhile, Trump has filed a lawsuit against Los Angeles, claiming the city is obstructing federal enforcement by refusing to cooperate with ICE.
DHS Fires Back
In response to mounting criticism, the Department of Homeland Security dismissed the argument that undocumented labor is the key to economic health.
“If there were any truth to the idea that rampant illegal immigration fuels economic growth, then President Biden would have a booming economy right now,” wrote Tricia McLaughlin, DHS Assistant Secretary, in a statement to Bloomberg.
A City in Limbo
With job sites abandoned, projects on hold, and tens of thousands of displaced residents in need of housing, Los Angeles finds itself in a precarious position. As political battles escalate between city officials, the state government, and federal authorities, the real costs of the crackdown are being paid by workers—documented or not—and the economy they help sustain.